Source: Govt depts bail out troubled Air Zim – DailyNews Live
Farayi Machamire 27 June 2017
HARARE – Various government departments loaned insolvent Air Zimbabwe over
$8 million to bankroll its operational expenses in the 2016 financial
year.
The Auditor-General (AG) Mildred Chiri revealed this in a forensic report
of government departments’ revenue statements and fund accounts for the
year ended December 31, 2016.
The AG established that the New Number Plate Revolving Fund (Fund) –
established to import blank registration plates and to sell plates to
vehicle owners – had extended $7 million to the struggling airline.
“The Fund advanced $ 7 578 660 to Air Zimbabwe for its operation expenses
and total loans amounting to $36 492 777 have been issued to date,” the AG
said in her findings.
“The constitution of the fund has no provision for issuance of loans to
related parties. Air Zimbabwe has over the years been unable to make any
repayments towards the reduction of the debt.”
“The accumulation of the Air Zimbabwe debt poses a financial albatross to
the fund and may have negative effect on its operations.”
Chiri added: “The Fund’s management should avoid straying from its core
business and the loans made to Air Zimbabwe should be recovered.”
In response, the fund’s management said the Transport ministry okayed the
loans.
“Loans to Air Zimbabwe made during the year under review were done with
the blessings of the ministry,” the management said.
It also emerged that the Meteorological Services Fund, established to
facilitate the provision of weather services and related products, had
also loaned hundreds of thousands of dollars to the ailing airline.
The Meteorological Services Fund is owed $1 684 443 by airline operators,
a figure which represents 92 percent of the total assets of the Met Fund.
“The debtors who owe the fund the bulk of the money are Air Zimbabwe and
South African Airlines. The ministry has engaged lawyers to recover money
from South African Airlines and the issue is being dealt with by the
courts,” said the Meteorological Services Fund management.
“As regards Air Zimbabwe, discussions to recover the amount owed have been
made but the airline cannot pay at the moment as it is nearly insolvent.
Efforts are being made to recover money owed by other airlines.”
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